1. The world’s wine markets by 2030: terroir, climate change, R&D and globalization Strategies for wineries over the next two decades Peter Hayes, Vice-President International Organisation of Vine and Wine (OIV)

2. 1000 ha Surface area of vineyards worldwide

3. 1 000 000 Hl World production of wine

4. Recent developments of the leading vineyards 1000 ha Australia’s Vineyards = 20% of France’s Vineyard Area

5. Surface area of vineyards worldwide 1000 ha Areas planted in vines of the 12 leading countries Forecast 2007 Prev.2007 / 2005 decreasing stable increasing

6. Global Issues: Problems, Opportunities, Drivers Global supply-demand balance & system inertia –Defining, analysing and interpretation of statistics –Modelling, scenario analysis and projection? –Emerging (BRIC) and adjusting producer/consumers Structure of distribution and retail sector –Recent and ongoing consolidation, limits to SKUs –Alternative access, promotion & servicing pathways? Political and social pressures on consumption, pricing, margins, growth –Social licence; health/wellbeing, environment –Sponsorship and tacit promotion –Competition for natural resources and infrastructure

8. National/Regional Issues : Problems, Opportunities, Drivers Industry investor and competitor behaviour –Industry planning, communication and adoption –Numbers, sector focus, current/future viability, “adjustment” Policy settings –Regulation, Taxation etc –Product and industry legitimacy Regionality Branding cf/vs Proprietary Brand development –Scale and allocation of investments and by whom? –Legitimacy and credibility of regionality –Risk; climate change and variability

9. Consequences Industry Legitimacy –Direct and indirect implications for industry’s “Licence to Operate” Accessibility, reliability and cost of resource access-land, water, energy, infrastructure---- Accountability –Development and implementation of BMP+, diverse/confusing/competing certification schemes –Alignment with regional landscape environmental targets, social objectives-community health and wellbeing –Role of a “Sustainability Performance Index” –Public audit and reporting; social/community dividend and environmental impacts etc

10. Proprietary : Problems, Opportunities, Drivers Regionality Branding c.f. Proprietary Brand development –Risk and exposure to weakest colleague –Reliable and valued differentiation-especially with “Climate Change”? Consolidation, Innovation and Diversification –Product; classic vs novel and FMCG approaches –Marketing –Sales and distribution Optimising business structures and scale –“Whole of business” modelling, planning and belief –Implementation and monitoring –Adaptation and resilience

11. For Industry and its Businesses Improved sector and business analysis interpretation and communication Deeper consideration of –Business positioning and potential –Entrepreneurial opportunity and risk management Adoption of more creative approaches in –R&D for contribution to design and delivery –Business planning and execution-action –Communications and Marketing –Adaptability and resilience

12. Vitivinicultural c.f. Human Factors What is the relative plasticity, adaptability and resilience of –The vitivinicultural system –The human operator –Societal institutions –Our markets The media Customers and Consumers?

13. Business Performance Heightened production and compliance costs Greater public accountability measures Issues of genuine demand/supply balance Impacts of supply chain consolidation and balance in market power; novel approaches to marketing and distribution? Profitability; individual and regionally –Capacity for reinvestment, innovation and development

14. Accountability, information, education and communication The public perception and product image of wine has been reinforced by regulatory, industry protocol and promotional assurances of origin, quality, integrity and sustainability communicated to the public, customers and consumers; especially evident with “terroir” based propositions (+organic---?) Engagement with the public regarding emerging pressures and industry adaptations must be well planned and managed in order to preserve and enhance these attributes

15. Optimal adaptation to climate, environment & social pressures needs; Development of regionally relevant and realistic potential scenarios Preemptive and active balance of management, technical and regulatory innovations to allow effective functioning of the sector, rather than –a belated uncoordinated recuperative action. Strategic investment in technical, social and economic R&D, information and communication Support and promotion by very well informed leaders and executive management within the public and commercial sector

16. Implementation of Mitigation/Adaption Strategies Clear leadership will be required from industry and government in making a firm commitment to; –Transparent and rigorous analysis of the national and regional impacts of change (climate, social etc) in its diverse manifestations---technical, environmental, social and economic –Communication of alternative scenarios and candidate responses is made –Appropriate adaptation of production and marketing processes –Well considered legal and regulatory change recognising a need for more adaptable management

17. And finally-Should the wine industry become more adventurous? In its engagement with customers and consumers? Different varieties Different wine styles Alternative representation of regionality Different lifestyle and customer/consumer needs-alternative grape based products Adapting industry organisation; variety, viticultural and oenological techniques; packaging and promotion to emerging biophysical and social climates?

18. Some Stimuli Creative thinking; Edward de Bono http://www.youtube.com/watch?v=UjSjZOjNIJg http://www.youtube.com/watch?v=UjSjZOjNIJg Outlook from Bloomberg Business Week; John Mariani http://www.businessweek.com/lifestyle/content/jan2010/bw2010017 _325474.htm http://www.businessweek.com/lifestyle/content/jan2010/bw2010017 _325474.htm How Globalization is Reshaping the World of Wine; The Wine Economist http://wineeconomist.com/category/eu-wine-market-reforms/ Strategies to reduce the harmful use of alcohol: draft global strategy; WHO http://apps.who.int/gb/ebwha/pdf_files/EB126/B126_13-en.pdf